Contact Management vs. Relationship Management

“I hate managing contacts, but I absolutely love meeting new people and establishing relationships.” That’s the phrase that hit me to write this when I come across this article Evernote Contact Manager written by Adam Boettiger. He articulated in a very systematic manner the differences between contact management and relationship management that I found many people often misunderstood them. I won’t be repeating the specific solution that Adam wrote in his article. (As you can click on the given link and read further.) What I wish to recap here are some of the excellent points that Adam mentioned in keeping contact management and relationship management as a separate process. This is something that business owners should understand well if they believe that relationship management really matters in their business, i.e. you recognize the long term value of customer and not just boosting sales by concentrating on single transactions. (If you believe in the latter, you can save your time from reading further, and Google for articles on “transactional marketing.”)

Why relationships matter?

Before we dwell into the techniques that Adam wrote about, I thought perhaps it is good to have a short primer on why relationships are everything in your business. In short, people do business with people, not businesses. If potential clients and customers know you, like you, and trust you, they will want to do business with you. Especially when the marketplace is competitive, how do you show your prospective customers that they can trust you? If they are not ready to buy, how do you build a relationship with them and let them get to know you? Likewise, how do you get to know them better so that you are able to serve their needs. As you meet different people in business, don’t think about what you could gain from them. Build relationship with people in advance, the worst would be attempting to build relationship only when you have the desperate need. Try to help them in every little way that you can. For examples: (Excerpted from Why Relationships Matter in Small Business and How to Build Them):

Building relationship with your competitors because you never know they could become your partner. If you encounter a prospective client who you know you can’t serve adequately, but you know someone who could serve them very well, send the client to that person or company, even if they’re a competitor. You’ll be known as the provider who cared enough to make sure that person was served well. And your competitor just might return the favor one day.

Building relationships with employees and contractors inspires loyalty. This one’s not about building friendships, but about building rapport. You want to form a connection and open a dialogue so that you can satisfy their needs and provide them with everything they need to do the best job they can for you.

Building relationship to the press is important if you seek any form of publicity. If the press knows they can come to you for a succinct quote, blurb, or comment on a particular matter, and if they know they can rely on you as a trusted expert who won’t make demands or have high expectations, they’ll come to you again and again for quotes and sound bites.

Tools and techniques

Building relationships is definitely more time consuming. That’s where proper use of tools and technologies will help. As I mentioned earlier, a lot of people misunderstood the process between contact management and relationship management. If you get it wrong, you will probably invest in the wrong set of tools that might not give you the results that you want, or worst case, it will create more work for you. Let me quote the definition that Adam wrote to clarify the difference:

Contact Management: Me being able to locate and retrieve your phone number and email address.

Relationship Management: Me using that information and more to, over a period of months, get to know you as a person and establish either a relatively shallow relationship (think: Twitter or Facebook) or a deeper relationship (think: in-person, phone, dinners, lunches, coffees, dates, marriage, life, etc.) with you.

Contact Management

For contact management, you can use any smartphone or email program can give you an address book or list of contact information. Just for example, I am using Google Contacts as my contact manager. (This is just my personal preference. It’s more important for you to understand the reasons and find what work best for you.) When I need a phone number, or need to send an email, I go to Google Contacts website. This works nicely for me because when I change a contact details in Google Contacts in a web browser, it is automatically added and updated on my smartphone, and the address book on my MacBook laptop. I don’t need to connect any cables for sync-ing, or install any software. All my contacts are stored in the cloud and I access them from any devices, including my smartphone, or when I am on vacation and using a public PC in an Internet Cafe.

Relationship Management

As for relationship management, I won’t be going into specific tools or products. My objective is not to promote a particular brand or product in the market. My objective is to share brand-independent techniques and strategies that support various practices in making relationship management easier for you. If I mention any brands or products, they are merely my preference for my setup. It is more important for you to use it as a reference, and understand why I set it up that way.

Keeps chronological history of the relationship. Your relationship manager should store how frequently you meet, perhaps the last time you had coffee with this person they told you they needed help with finding a nice dog. After you had coffee and before you forgot, you inserted the note with date and time stamp, and put: “Met for coffee. She’s looking for a dog. Prefers Rottweillers, not poodles. Would like it to be a shelter dog rather than from a breeder”.

Searchable history of the relationship. Continue from the previous example, four months after having coffee with her, you get a call from your friend who runs the Dog Rescue Center in Montana. Turns out she’s looking to place a Rottweiller who is going to be put to sleep in 2 days if they can’t find a home for her. Now, you need to be able to use your relationship manager and quickly find the people whom you met with or spoke with some months ago, who was looking for a Rottweiller. Adam’s solution (as he mentioned is his article) is – he boot up his laptop and Evernote, click on the CONTACTS Notebook and search “dog” and “rottweiller”. Immediately the friend you had coffee with four months ago comes up.

Less is more, where relationships are concerned. It is physically impossible for you to maintain deep relationships with 1000 people and still be employed. Really. It’s an easy time-based equation. Goes something like this: Hours you have available per month / # Relationships you want to grow or maintain = Time that you have for each person. Go through your contacts list and pare it down significantly so you can put more time and attention into fewer relationships.

Remember to stay in touch. Relationships, especially good ones, take work as well as an investment in time. You should always remember to stay in touch regularly with your contacts. Your relationship manager should be able to list your contacts by “Last Date Updated”, thus allow you to see how long it has been since you changed or added something to a contact’s note. In other words, this allow you to see how long you haven’t spoken to person. As for me, I use Coconect to remind me on seasonal events and contact’s birthday, and send out greetings on these occasions. This works well for me as I believe that keeping-in-touch should be all year long and genuine (and not sending newsletter or sales related information). It also saves my time by preparing me a nice e-card and warm greetings message. (I am just not good in these!) Also, it’s probably just me, I hate people who address me in their greetings like “dear valued customers” or “dear friends”. Sometimes I am wondering why can’t they just call my name? I like to treat the relationship with my contacts in a very personal and special manner. In that sense, this solution really works to my preference.

Givers’ gain. When you meet someone new, after you get to know them, you should always ask the same thing: “If there was one thing that I could help you with this week or this month or this year, what would it be?” You need to believe that if you help enough people, it generally comes back to you in some way. But like Adam said in his article, “Our society has focused on ‘Me Me Me Me Me Me’ for so long that it’s quite funny the looks I get when I say this to a person I met in a coffee shop. They assume that you have to have an ulterior motive – selling or otherwise – if you’re wanting to help them. And I think that’s sad.” If you are a frequent user of social media such as Facebook, LinkedIn, or Twitter, ask yourself if you spend time on Facebook rewarding new ‘likes’ rather than asking for them? Social media is about building relationships. It starts with building rapport trust, rather than just sell, sell, sell. Give your followers or fans something of value to them. Selling is of course the ultimate goal, but establishing a trusted relationship is one of the steps to get there.

Relationship management can be an excellent strategy for getting your loyal and best customers to tell others about you. Helping other people is most powerful way to build relationships. If you think this is something that you would like to start working it, try picking three people you don’t know well, create a note in your relationship manager for each of them, ask them how you can help them. Tag the note with descriptive keywords or so that they will come up on future searches. Ask for their birthday, and send them genuine greetings on their birthday and other special occasions. Let me know how does it go after 6 months. Like Adam said at the end of his article, “Pay It Forward and it will come back to you a hundred-fold. I guarantee it.”

Tips: Relationship management is one of the marketing innovation strategies to help you to break away from price war and give your customers a good reason to choose you. You may want to try out the Innovation Scorecard Test if you are interested in knowing the areas you can innovate your business to beat the competition.

About The Author

Thomas Cheah is the Principal CTO-for-hire of Procto. He helps business owners and executives to innovate their business model thru strategic technology management so that they get 80% of the benefit for 20% of the cost. If you have innovative ideas but do not the technical expertise, he is your partner to validate and build your digital business models. Thomas believes that constant business innovation is increasingly important in today's business environment so that our business is prepare for rapid change of customer behavior, rising cost, and globalization in order to stay ahead (or away) of competition.

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